Tuesday, 23 February 2021

Demand side tinkering will be just that – supply the key


A new housing report from the New Zealand initiative confirms again what ACT has been saying for a long time – housing supply needs to be focused on from all angles,” says ACT Deputy Leader Brooke van Velden

“ACT has long said the only solution to a shortage of housing is to make it easier to build houses.

“No matter how obvious this may seem, successive Governments and their opponents have obsessed over taxes, grants, lending restrictions, overseas buyers, Government owned houses, anything they could think of but making it easier to build homes.

“In short there’s been endless demand side tinkering – and Grant Robertson has promised more to come – but the report makes it clear ‘the focus on demand-side measures has been a failure.’

“Now finally, the issue of supply is finally being laid bare; as a population we are getting older and fewer people are inhabiting each home as family unit sizes change. 

“If we don’t solve the issue quickly, rents will continue to increase and more families will be forced onto social housing wait-lists. 

“House prices will increase even faster than they have been making it harder for a young couple to buy their first home. This will have consequences for the next generation of New Zealanders and create division like we’ve never seen before.

“The report shows that, on a medium scenario, the country will be 200,000 houses short by 2060. If we keep going the way we are the situation with housing will get worse, not better. The only question is whether we can recognise the housing problem is a supply problem and change direction.

“ACT has long said that housing supply is about three things: land, infrastructure and buildings. We’ve advocated replacing the RMA, sharing GST on new builds with the local council to fund infrastructure, and getting councils out of the building consent business.

“The Government has belatedly come to the RMA party, but it is not clear they are changing the underlying principles of the law. If anything it appears they will pass the RMA by three other names, with additional decision making powers for Iwi. This won’t improve supply.

“Freeing up land will not help get more homes built if you can’t get there. There’s no point building a home that isn’t connected to opportunity, by which we mean jobs and education.

“We need to ensure that if councils do say yes to growth, they can afford the infrastructure.

“Finally, councils are not qualified to inspect new builds. That should have been clear after the leaky buildings saga, but now anyone trying to build a home is subject to endless delays by councils paranoid about further leaks and failures.

“If New Zealand is going to be a place where the next generation can afford a place of their own, those places must be built. It is time to throw aside the distractions, and fix a shortage of homes by making it easier to build a home.”

ENDS